Investing direct mutual fund Zerodha Coin Groww Kuvera MFU ET Money

Direct mutual fund investing in India

From WebNotes, a public knowledge base. Last updated 18 May 2026. Reading time ~13 min.

Direct mutual fund investing in India refers to investing in the direct-plan variant of a mutual fund scheme, bypassing the distributor channel and consequently paying a lower total expense ratio than the equivalent regular plan. The SEBI direct-plan regime, introduced on 1 January 2013, mandated that every Indian mutual fund must offer a direct variant of every scheme alongside the regular variant. The mechanism is simple: the investor transacts directly with the AMC (or through an execution-only platform that does not earn a distribution commission) rather than through a SEBI-registered mutual fund distributor.

The economic advantage is the difference between regular and direct expense ratios, which compounds over multi-year holding periods. Across equity-oriented schemes, the direct vs regular TER differential typically ranges from 0.5 to 1.0 per cent annualised. On a Rs 10 lakh investment held for 10 years, this saves roughly Rs 50,000 to Rs 1 lakh in cumulative expenses, equivalent to an additional 0.5-1.0 per cent annualised return at no additional risk or effort.

This article serves as an editorial hub on direct mutual fund investing in India, organised by the structural questions a serious investor needs answered: what defines a direct plan, what platforms exist, what the economic advantage is, how the practical investment workflow operates, and how to switch from existing regular-plan holdings. Per-platform reviews, per-AMC direct-access portals, and operational how-to guides live on the linked spoke articles.

The SEBI direct-plan regime

Origin and rationale

Before January 2013, every Indian mutual fund scheme was sold through distributors who earned a trail commission embedded in the scheme’s expense ratio. There was no way to invest directly with the AMC at a lower fee, even for sophisticated self-directed investors. SEBI’s January 2013 circular mandated:

Every existing scheme must offer a direct variant.
The direct variant must have a lower expense ratio than the regular variant.
Investors should be able to transact directly with the AMC or through an execution-only platform.
AMCs must clearly disclose the direct option alongside the regular plan.

The rationale was investor protection: long-term retail wealth-building was being eroded by distribution commissions that retail investors did not always understand. The direct-plan regime created an explicit fee-disclosure mechanism and a structural alternative.

How direct plans work

A direct plan and the corresponding regular plan are identical in every respect except the expense ratio:

Same portfolio: both variants invest in the same securities at the same time.
Same NAV variation: both NAVs move in lockstep based on the underlying portfolio, except for the embedded TER differential which causes the direct NAV to outpace the regular NAV by approximately the TER difference annualised.
Same fund manager: the same investment team manages both variants.
Same scheme rules: load structure, lock-in (if any), redemption rules, transaction cut-off times, and minimum investment amounts are identical.
Different ISIN: the direct plan has its own ISIN distinct from the regular plan.
Different folio identifier: most AMCs maintain separate folios for direct and regular holdings even when held by the same investor.

The economic difference compounds. Over 20 years, a 0.75 per cent annualised TER difference produces roughly a 16 per cent terminal-value advantage in the direct plan, assuming equal portfolio returns.

Distribution platforms for direct mutual funds

Direct plans can be accessed through three broad channels:

Execution-only platforms (EOPs)

Execution-only platforms are SEBI-registered intermediaries that facilitate direct-plan transactions without providing advisory or earning commission. The SEBI EOP regulations 2023 formalised this category. Major EOPs:

Zerodha Coin : holds units in the investor’s demat account through Zerodha as DP. Free for end users; Zerodha makes no revenue from MF transactions (cross-subsidised by broking).
Groww : combined platform for mutual funds and equity broking; holds units in SOA (Statement of Account) form by default. Free for end users.
Kuvera : pure direct-MF platform owned by CRED. Free for end users; monetisation via cross-selling adjacent products.
ET Money : direct-MF discovery and tracking app published by Times Internet. Free for users.
Paytm Money : integrated with the Paytm payments ecosystem.

The Mutual Fund Utility (MFU)

MFU (mfu-mutual-fund-utility) is the AMFI-promoted shared transaction platform. MFU provides a single CAN (Common Account Number) that aggregates holdings across all AMCs into one interface. MFU is the only platform that combines direct and regular plan access in one place, depending on whether the investor onboards via a distributor or self-direct.

The MFU account statement format is the canonical reference for MFU-held portfolios.

RTA-direct portals

The two principal RTAs operate AMC-aggregating direct portals:

CAMS Online portal for the ~25 AMCs served by CAMS as RTA.
KFinKart portal for the ~15 AMCs served by KFin Technologies as RTA.

These are direct-only (no distributor commission), free, and useful for investors who prefer to access multiple AMCs through their RTA rather than through a broker or fintech platform.

AMC-direct portals

Every AMC operates its own portal for direct investors. AMC-direct is the most stripped-down route: investors get the lowest-friction experience for that AMC’s schemes but cannot consolidate across AMCs. Most retail investors use AMC-direct only for AMCs that command particular loyalty, falling back to MFU or an EOP for multi-AMC convenience.

Platform comparison

The direct mutual fund portals comparison (Coin vs Groww vs Kuvera vs MFU) covers the practical differences. Key differentiators:

Dimension	Zerodha Coin	Groww	Kuvera	MFU
Unit holding	Demat	SOA	SOA	SOA
Cost to user	Free	Free	Free	Free
AMC coverage	All	All	All	All
Demat consolidation	Yes (with Zerodha equity)	Yes	No	No
Goal-based planning	Limited	Yes	Yes	No
Family / joint folio	Limited	Limited	Yes	Yes
Mobile app quality	High	High	High	Adequate

The regular-vs-direct economic gap

The structural advantage of direct plans is documented in direct vs regular plan TER differential . The gap varies by scheme category:

Equity-oriented funds: 0.5 to 1.2 per cent annualised TER advantage in direct.
Debt funds: 0.1 to 0.4 per cent annualised TER advantage in direct (the regular-plan commission is smaller because debt yields are lower).
Hybrid funds: 0.4 to 0.8 per cent annualised TER advantage.
Index funds and ETFs: 0.05 to 0.20 per cent annualised TER advantage (very low base TER limits the absolute differential).
ELSS: 0.6 to 1.0 per cent annualised TER advantage.

Worked example

A Rs 10 lakh investment in an equity-oriented direct plan returning 12 per cent gross annualised over 15 years grows to Rs 54.74 lakh. The same investment in the regular plan with a 0.75 per cent TER drag returning 11.25 per cent net grows to Rs 49.40 lakh. The direct-plan advantage compounds to Rs 5.34 lakh over 15 years, or roughly 11 per cent of the regular-plan terminal value.

Operational workflow

Onboarding for first-time investors

The full first-time direct-MF investment flow proceeds:

PAN and Aadhaar setup: required across all platforms.
KYC verification through the KRA ecosystem (one-time across all AMCs).
Platform onboarding: registration on Coin, Groww, Kuvera, MFU or AMC-direct.
Bank linkage: cancelled cheque or penny-drop verification.
First transaction: lump sum or SIP through UPI autopay or NACH e-mandate.
Folio creation: AMC creates a new folio against the first investment.
Subsequent investments: top up the existing folio or open new folios for different AMCs.

SIP setup

SIP setup on direct plans uses the same UPI autopay or NACH e-mandate framework as regular plans. The UPI autopay for SIP is the dominant route for sub-Rs 1 lakh SIPs. NACH e-mandate (via NACH e-mandate framework ) is used for larger SIPs.

Switching from regular to direct

Many investors who started with regular plans want to switch to direct to capture the TER advantage. The how to switch from regular to direct via Coin and the broader direct-to-regular and regular-to-direct switch implications cover the mechanics:

Switch within the same AMC is processed as a redemption from the regular plan followed by a subscription to the direct plan, triggering capital gains tax on the redemption leg.
A direct switch with the AMC processes both legs at the same NAV on the same day, simplifying tax reporting.
Holding-period for capital gains starts fresh on the direct-plan units (new acquisition date).

The tax implications make the regular-to-direct switch most attractive for new investors before significant gains have accrued in the regular plan, or for older holdings where the LTCG is below the annual exemption threshold.

Practical considerations

Statement consolidation

The Consolidated Account Statement (CAS) issued by CDSL or NSDL covers all dematerialised holdings (including MF units held in demat form via Zerodha Coin and similar). The CAMS Consolidated Account Statement and KFin equivalent cover RTA-held holdings.

For investors holding MF units across multiple platforms in different forms (demat at Coin, SOA at Groww, SOA at MFU), the consolidation requires combining the CAMS+KFin CAS with the demat CAS. The complete picture is in CAMS and KFin capital gains statement .

Capital gains reporting

Direct-plan capital gains are reported identically to regular-plan gains. The equity mutual fund taxation , debt mutual fund taxation post-2023 , and hybrid mutual fund taxation frameworks apply equally. The capital gains tax on equity in India hub covers the rate structure including the July 2024 Finance Act amendments.

Nomination and transmission

Direct-plan folios follow the same nomination and transmission rules as regular plans. The mutual fund transmission process and the SEBI nomination opt-out option apply uniformly.

External references

References

SEBI circular CIR/IMD/DF/21/2012 dated 13 September 2012, mandating direct plans effective 1 January 2013, sebi.gov.in.
SEBI (Execution Only Platforms) Regulations 2023, sebi.gov.in.
AMFI guidance on direct-plan disclosures and the regular-direct expense ratio differential, amfiindia.com.
MFU (Mutual Fund Utility) operating framework documentation, mfuonline.com.
CAMS and KFin Technologies investor-portal documentation.
Public disclosures of expense ratios from major AMCs on direct and regular variants, FY 2024-25.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 18 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.